September 25, 2017
A lot of property sellers may not be cognisant of this. The ATO changed legislation on 1st July 2017 that impacts all property owners selling a property in excess of $750,000 (previously $2,000,000). As of this financial year, it is compulsory as an Australian Resident to apply through the ATO for a Clearance Certificate. Should the Certificate not be issued, 12.50% of the sale proceeds may need to be sent to the Commissioner of Taxation by the purchaser. The vendor may claim a credit for any withholding amount paid to the ATO in their next tax return.
If the certificate is not obtained in time, the new legislation may be problematic for household upgrading out of their owner occupied property. From my understanding, it can take 14- 28 days for the certificate to be issued after completing the online application.
This is the link to the ATO outlining the requirements.